IoT seems like a panacea, but it’s slightly more complicated. We need to think strategically instead of technically in order to get the desired outcomes. I remember reading not that long ago that companies of the future will be driven by engineers. High-tech companies make a large margin that’s true, but they’ll be powered by engineers, not driven by them. The business side should drive and that, according to a clear strategy.
What’s strategy? Michael Porter, professor at Harvard Business School and a pioneer of strategy, says it’s “about being different”. You need to create a competitive advantage for your company, navigate in the blue untapped ocean instead of risking a purely cost-driven battle against similar competitors. Then any decision you make should help accomplish this vision of your company becoming different from what’s already out there. How do you implement it in your business?
Practically, you need to ask the right questions. Following a trend because you’re afraid of being left behind is the best way to lose money. IoT can very likely help you make a difference, but do you know what this difference you’re trying to make is? You can create and collect data from your operations, and then you can probably improve your processes a lot, for example by avoiding having downtimes for your machines thanks to predictive maintenance. But is this really the greater ROI you can get? I posted before about things successful people do differently in Silicon Valley. One of them is to develop their strength instead of leveling their weaknesses. Well, you could apply this to your business as well. Use IoT to make a greater difference with your competitors based on your strategy! Now this may be obvious but the statistics are here: “The survey showed that 42 percent [of the companies] found they had too much data to analyze it all efficiently. Meanwhile, 27 percent weren’t sure what questions to ask about the information, and 31 percent simply don’t store any IoT data”. This is the reality out there.
Not storing any IoT data is neglecting quite a lot of its potential ROI. But the fact that 27% don’t know what questions to ask reveals a lack of strategic thinking when it comes to IoT adoption. What problem are you trying to solve with IoT? Some companies tackle social problems. For example, “how do you make cities safer?” – Possibly raises the question “how can you reduce crime?” Then, thinking of ways to use IoT in this regard, companies create state-of-the-art solutions like predictive crime analytics. “Developed by Hitachi Data Systems, PCA ditches previous predictive models that depend on personal variables – the location of a school or the mention of a particular drug on Facebook, for example. Instead, it uses near-infinite information such as weather patterns, public transport movements and gunshot sensors, to second-guess the crooks” (The Telegraph). This is an example of a strategy-based use of IoT data. Its adoption and integration are answering a question asked in the context of a defined strategy.